The A-Team: Rail Freight on Track
Mon, 19 Jul 2010
Tony Berkeley on collaboration: a much talked-about subject, which remains confined to being just talk
For logisticians, it makes perfect sense to share loads and no one would ever denounce it, yet for many, it remains little more than a pipe dream.
While most shippers accept the fact that collaboration can slash supply chain costs, increase environmental cost-savings and dramatically reduce empty-running, the very idea that a rival could benefit from improvements in your own logistics chain tears shippers up inside.
Even now, after the recession, you can count the number of firms really doing it properly on one hand. TDG is famous for the work it acheived with Kellogg’s and Kimberly Clark, and Stobart Group has worked hard to sell ad-hoc space on its loads for its retail customers.
Graeme Undy, Rail Operations Manager at Stobart, recently spoke at an RFG logistics seminar about customers collaborating for modal switch. He said convincing customers was all about creating good round trips, which were key to filling backloads and making services ultra cost-effective. This, he said, was where increased collaboration was vital to making rail more competitive.
“There have been many attempts that have failed or were not fully operational for the customer,” he said. “That puts a sour taste in their mouths. We are trying to prove it is not a root cause of rail. When we first started talking about venturing into Europe people laughed, saying we would never fill the trains going out, how wrong they were.”
Attitudes to rail freight are changing, he said, from purely an environmental PR stunt to seeing tangible cost and environmental benefits, but convincing shippers to share is still tough. Most diesel locos achieve a 33% fuel-saving when compared with trucks moving the same load, and when shippers are faced with those kind of facts, it becomes harder to ignore rail or collaborating.
However knowledge won’t be enough; creativity will be the thing that really saves the day – those 3PLs willing to throw the rule book out of the train window and come up with something more personalised will do well.
It’s sad, but most train operators will not even consider operations without achieving critical mass from a single customer and yet are unable to convince shippers to investigate sharing, beyond the basic level.
Recently, Mike Branigan, CEO of TDG, told the RFG that de-stocking was changing the shape of the industry and it was not going to go back. This trend would suit increasing collaboration and may provide a tilting point going forwards.
“Multimodal is the next step”, he said. “But we need to create the dynamics turning a supply chain into a rail solution. People want to continue to push the envelope.
"We have to have some clarity of objectives to reach. It’s not easy to see who needs to lead the way – I guess we all have to.”
While most shippers accept the fact that collaboration can slash supply chain costs, increase environmental cost-savings and dramatically reduce empty-running, the very idea that a rival could benefit from improvements in your own logistics chain tears shippers up inside.
Even now, after the recession, you can count the number of firms really doing it properly on one hand. TDG is famous for the work it acheived with Kellogg’s and Kimberly Clark, and Stobart Group has worked hard to sell ad-hoc space on its loads for its retail customers.
Graeme Undy, Rail Operations Manager at Stobart, recently spoke at an RFG logistics seminar about customers collaborating for modal switch. He said convincing customers was all about creating good round trips, which were key to filling backloads and making services ultra cost-effective. This, he said, was where increased collaboration was vital to making rail more competitive.
“There have been many attempts that have failed or were not fully operational for the customer,” he said. “That puts a sour taste in their mouths. We are trying to prove it is not a root cause of rail. When we first started talking about venturing into Europe people laughed, saying we would never fill the trains going out, how wrong they were.”
Attitudes to rail freight are changing, he said, from purely an environmental PR stunt to seeing tangible cost and environmental benefits, but convincing shippers to share is still tough. Most diesel locos achieve a 33% fuel-saving when compared with trucks moving the same load, and when shippers are faced with those kind of facts, it becomes harder to ignore rail or collaborating.
However knowledge won’t be enough; creativity will be the thing that really saves the day – those 3PLs willing to throw the rule book out of the train window and come up with something more personalised will do well.
It’s sad, but most train operators will not even consider operations without achieving critical mass from a single customer and yet are unable to convince shippers to investigate sharing, beyond the basic level.
Recently, Mike Branigan, CEO of TDG, told the RFG that de-stocking was changing the shape of the industry and it was not going to go back. This trend would suit increasing collaboration and may provide a tilting point going forwards.
“Multimodal is the next step”, he said. “But we need to create the dynamics turning a supply chain into a rail solution. People want to continue to push the envelope.
"We have to have some clarity of objectives to reach. It’s not easy to see who needs to lead the way – I guess we all have to.”
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